Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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Solution Exhibit 10.15
Graphic solution to find optimal mix, Fiordi-Ligio Srl.
10.16 Optimal sales mix fora retailer, sensitivity analysis.
(30–40 min)
1
Let
G
= floor space of grocery products carried.

D
= floor space of dairy products carried. The LP formula of the decision is
Maximise €10G + €3D
Subject to €10G
+ €3D < 4,000
€10G
> 1,000

€3D > 1800
2
Vier-und-Zwanzig may wish to maintain its reputation as a full-service food store carrying both grocery and dairy products. Customers may not be attracted if Vier- und-Zwanzig carries only the product line with the highest unit contribution margins. (Marketing and economics courses examine this issue under the label of interdependencies in the demand for products)
3
Solution Exhibit 10.16 presents the graphic solution. The optimal solution is 3,200 square metres of grocery products and 800 square metres of dairy products.


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012 The trial-and-error solution approach is

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